Michael E. Szymanczyk, the CEO of Altria Group said the company has been occupying a solid and strong position in all segments of the, with Marlboro being top-selling cigarette across the nation, and strong competitors in smokeless tobacco products and cigars categories.

Last week Altria Group Inc. revealed its fourth-quarter profits report and admitted that expenses cuts and strong performance by smokeless tobacco products resulted in a 7-percent increase in 4Q profits, despite the company has sold less cigarettes. Altria shut down its manufacturing plant in North Carolina to reduce expenses and offset dropping cigarette demand.

The Marlboro maker sale volumes dropped 11.4 percent in 4Q of 2009 comparing to the same period in 2008. The company experts suggested the industry-wide reached 10 percent in the fourth quarter. As regards annual expectations, Altria’s chairman said they sold 12.2 percent fewer cigarettes, whereas the number is not so dramatic for the industry as a whole, with an 8 percent decline.

Philip Morris USA experienced volume drops among all major cigarette brands, such as Marlboro, Virginia Slims and Parliament. Marlboro, the number one seller in the USA fell 0.4 percent from 42.1 percent to 41.7.

PM also raised prices on the majority of the brands, and consequently lost its share, because major rivals Lorillard and Reynolds American launched many discount and promotional campaigns for their flagship brands.

In smokeless tobacco category, Copenhagen continues showing impressive performance, as it added another 1.5 percent to its market share in 4Q mainly because of the launch of new wintergreen variety. Another successful smokeless tobacco product, Skoal as well showed comparatively solid performance in the fourth quarter if comparing this brand to other products that seemed to be affected by Copenhagen new wintergreen variety. These brands are trying to reach Grizzly Snuff – the leading smokeless tobacco product across the nation, produced by Reynolds American’s subsidiary.

To profit from the successful introduction of the latest product, Copenhagen intends to launch several new smokeless brands in the beginning of 2010. Skoal as well is focused on strengthening and further boosting its presence in smokeless tobacco market, which is considered to be the next successor of cigarette industry.

In addition, Altria plans to start nationwide sales of Marlboro Snus in spring. Marlboro Snus were test-marketing over several months and received a very good feedback from potential consumers. While analysts consider that cigarette industry is dying slowly but constantly, they agree in opinion that Snus brands launched by tobacco giants recently will yield their producers even more revenues than cigarettes used to.

In cigar segment, Altria also displayed nice performance; with its major cigar brand Black & Mild added 1.3 points to its last year’s result, regardless of the fact that the company sold 3.6 percent fewer cigars than in 2008.

The Chief Executive Officer said that they expect that in 2010 business environment will be unstable with many challenges, as cigarette demand will keep falling, thus they will have to lay off more employers. In addition, the company expects new regulations from FDA and tax hike, what would also dramatically affect the industry

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